It may be the real American dream: a monetary windfall drops square in your lap. Maybe it’s an inheritance from that ridiculously rich aunt you never knew, or simply the budget bonanza scored when you finally get all the kids out of daycare.

You pinch yourself to make sure it’s real. Then you panic. What to do now?

David Blaylock, a LearnVest certified financial planner, warns that poor money planning—for athletes, celebrities, and lucky schmucks like you—can accelerate the path from riches to ruin.

Instead, he says, “Approach a windfall as something that can remove pressure from your current situation,” not necessarily change your life overnight.

Here’s a to-do list—and an equally important not-to-do list—to help you consider how best to nurture your newfound bucks.

What To Do

Exhale. Surprise or not, a money boon can unsettle even the coolest characters among us. Don’t jump to buy big-ticket items or services you may regret later. Let it all sink in s-l-o-w-l-y.

Make a plan. Determining your next steps should take some careful thought about what you need to do and what the tax consequences are (you didn’t think you could escape the Tax Man, did you?). Yes, you need to cut debt and build savings, but maybe it’s time to replace that gas-guzzler in your driveway or get your kid’s teeth straightened. If you don’t already have one, consider hiring a financial planner, an attorney, or an accountant—maybe all three. There’s no shame in reaching out for professional help.

Pay off debt. That’s a no-brainer. What takes careful consideration is what to tackle first, whether to pay it all off, and what to wait on (see the “what not to do” list). Credit cards, particularly those with high interest rates, are a good first step to clearing the promissory decks. Can’t totally clean the slate? Chip away at outstanding debt that is approaching the limit on some cards. That’s a twofer because you’re shaving off debt and protecting—maybe even improving—your credit score.

Save it. For a rainy day. For a college degree in the future. For a fatter emergency fund. Or max out an Individual Retirement Account (IRA) contribution.

Fix stuff. Is your roof on its last leg? Here’s another idea—install energy-efficient appliances to pull down that pesky monthly utility bill. Smart home-improvement steps can help extend your windfall.

Indulge, sure! There’s nothing wrong with taking a little chunk of that money and treating yourself to something you’ve always wanted to have or do. Frivolity is allowed. But remember, indulge in moderation, and only once. LearnVest suggests spending no more than 10% of the windfall. With the 10% rule, you actually allow yourself to celebrate—and you won’t regret spending it all in one place. Sticking to the only-once rule means you won’t be tempted to spend 10% every week.

Retire it. Unless you are sure and certain that your retirement nest egg is safe and growing steadily, squirrel away some extra dollars for those golden years. They’ll come sooner than you think and you may need more money than you think.

What NOT To Do

Blab about it. Braggarts never win. Your family, friends, and even your distant acquaintances have fantasies about their own sudden bonanzas and may look to you, the show-off, to fulfill them.

Heed the SOS. If you couldn’t help but spread the good word about your windfall, you must prepare yourself for the flood of “can-you-please-help-me?” calls that will swamp you. They’ll want you to invest, buy, or outright give up some of your loot for the good of mankind, or rather, theirkind. If you can’t say no, find someone who can say it on your behalf.

Don’t pay down “good” debt. Wait, what? Good debt? Yes, there is such a thing, and it comes in the form of your mortgage or other tax-deductible liabilities like school loans. Of course, if the interest is ridiculously high, then try to fix that first. But mortgage debt and school-loan debt tend to have low interest rates and a long, long payoff period. You may be better off socking the money elsewhere.

Spend, spend, spend. When you’re thinking about all the things you could buy, remember the devil on your left shoulder.

We've Heard It All

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